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2004 (1) TMI 207 - AT - Central ExciseExcess stock of fabrics - non-duty paid nature of the goods - confiscation and penalty - Evidence - Proof of fact - Statement made by the owner - purchase and sale of MMF - HELD THAT - The proprietor of M/s. N.D. Textiles has the peculiar knowledge of the nature of fabrics in his possession but he refuses to part with that knowledge except saying that the fabrics are non-duty paid. In such a situation are the officers expected to leave the fabrics in question alone on the sole ground that they are not able to establish who manufactured them even though there is a clear admission on the part of the person that the fabrics are non-duty paid, is the question. Such an action may lead to absurd results. More over what is admitted need not be proved aliunde. Proof of a fact in issue may be by direct evidence as well as by circumstantial evidence. By circumstantial evidence is meant, proof of other relevant facts from which the fact in issue may be inferred. In quasi criminal cases prima facie doubt is sufficient to shift the onus to the assessee or accused Narasinga Muthu Chettiar 1948 (4) TMI 1 - MADRAS HIGH COURT . There is sufficient circumstantial evidence in this case to establish the non-duty paid character of the fabrics. It is not understood how the Commissioner (Appeals) concludes that the statements are dictated. Viewed in the light of the fact that the respondent had been paying duty on the goods involved by cheques, I hardly see any reason in the Commissioner (Appeals)'s finding that the statements made by the respondent are not voluntary. All in all the department could establish the non-duty paid character of the goods. The Commissioner (Appeals)'s order casting doubts on the statements made by the respondent is not warranted. Once he rejected the statements the whole case fell. The statements should not have been rejected lightly particularly when they are not retracted. On the question as to who should discharge the duty, undoubtedly it is the manufacturer. But in the present case non-duty paid goods are found in some other person's premises who admits that he is liable to discharge the duty. The Department cannot be faulted for accepting the duty and holding him liable to penalty for having actively connived in the process of evasion. The Commissioner (Appeals) set aside the whole order of confiscation and imposition of penalties. M/s. N.D. Textiles is a proprietary firm. The lower authority imposed penalty both on the firm and the proprietor. The Commissioner (Appeals)'s order insofar as it sets aside the penalty has to be upheld. But it is not for me to decide which penalty has to be upheld in the absence of any representation from the respondents. The appeal is allowed. The order of the Commissioner (Appeals) is set aside.
Issues involved: Appeal against order of Commissioner (Appeals) setting aside original authority's order regarding excess stock of fabrics, duty payment, and penalties imposed on the appellant.
Summary: 1. The Central Excise officers conducted a search at a shop premises and found excess stock of fabrics without duty payment. The proprietor admitted to receiving fabrics without Central Excise cover and not paying duty. The original authority imposed penalties and confirmed duty payment. 2. In appeal, Commissioner (Appeals) set aside the order citing lack of voluntary statements, failure to establish non-duty paid nature of fabrics, and denial from mills alleged to have processed the fabrics. Referred to Supreme Court's decision in Ujagar Print's case. 3. Department's appeal relied on Notification No. 27/92 and Supreme Court's decision in Bajrang Gopilal case to argue that the shopkeeper is liable for duty payment as the manufacturer. 4. The department established non-duty paid nature of goods through the proprietor's statements. Commissioner (Appeals) cast doubts on the statements but failed to provide substantial evidence against duty evasion. 5. The appeal was allowed, setting aside the Commissioner (Appeals) order and upholding penalties imposed by the original authority on the appellant.
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